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Home prices surge, not for the reason people think

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The latest read on surging American home prices comes Tuesday from the S&P/Case-Shiller Home Price Index. But recent increases are not because buyers are abundant and excited. For the moment, weak supply is driving the spikes more than strong demand. Here’s why supply is low:

1. Developers are building more rental apartments, which means fewer new homes on the market.

2. Some current homeowners who would like to sell aren’t putting their homes on the market. Many families can’t qualify for mortgages under today’s stricter lending standards, which means they’re staying put instead of selling and trading up.

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